Commercial Agency Law: Gledhill v Bentley Designs

The recent case of
Gledhill v Bentley
Designs has highlighted
an important issue in
commercial agency law.
Mr Gledhill had been a commercial agent for
Bentley Designs for 17 years, during which
time he was their best agent, earning on
average £85,000 a year from them in
commission.
However, in 2006 Bentley Designs informed
its agents that they would have to use email
for future communications.
Mr Gledhill refused to comply with these
instructions, and continued to use phone
and fax in his dealings with the company
despite multiple requests not to do so.
Bentley Designs claimed that the change
was particularly relevant to Mr Gledhill, as his
handwriting was difficult to read and had led
to mistakes being made in the past.

Bentley Designs offered Mr Gledhill personal
training in the use of email, and stated that,
should he again fail to change his working
practices, he would be charged a monthly
administration fee of £100.
Mr Gledhill responded by verbally abusing
the managing director of Bentley Designs
through voicemail and over the telephone.
Due to these actions, and the fact that Mr
Gledhill refused to apologise, Bentley
Designs felt they had no choice other than
to terminate his agency agreement.
Under the commercial agency regulations,
an ag e nt w ill not be e ntitle d to
compensation or indemnity on the
termination of an agency agreement if the
reason for termination is because the agent
has failed to carry out all or part of their
obligations under the agreement.
As it was, the court decided that Mr Gledhill
was not entitled to compensation or
indemnity from Bentley Designs due to the
way in which he had spoken to the managing
director of the company.

Although the matter was resolved in their
favour, Bentley Designs would have been at
less risk of having to make a substantial
payout to Mr Gledhill if they had terminated
the agency agreement due to his failure to
comply with the new communication policy
they had imposed.
This was a much clearer breach of the
agency agreement, and it would have been a
great deal easier to justify their actions
based on these grounds.

Disclaimer: This column does not contain legal advice and is for general
guidance only. Agentbase, Ashby Cohen and the writer accept no
liability in connection with the general guidance given in this column.